>> all right. we can sustain the momentum. otherwise, let's say it's a great day. i promise to find bargains for you right here on "mad money." i'm jim cramer. i will see you monday . our goal is to stop folks from doing us harm and if every step we are taking to try to prevent a terrorist attack is on the front page of the newspapers or reason television, presumably the people who are trying to do us harm are going to be able to get around our preventative measures. >> all right. that's president obama speaking out today defending the widespread computer under surveillance and phone record-keeping program at the nsa, but is this really all there is to it? and isn't this the kind of strong contrast to the

presidents president obama made as a candidate and even in his inaugural address? and goldilocks jobs, stocks exploded 208 points on the dow with 175,000 jobs created in may suggests the fed will not taper or tighten, but you know what, there are a number of weak signs in this report and we will comb through the whole story. those stories and much more coming up on ""the kudlow report,"" which begins right no now. good evening, everyone, i'm larry kudlow. this is "the kudlow report." today, president obama said the government is not listening to your phone calls. the nsa snooping is for national security purposes only. ee mon eamon javers joins us now. good evening. >> good evening, the president went out of the way to take a question from a reporter.

he said the tradeoff is worth it and this program yielded useful intelligence for the united states. he said, we are not listening to your phone calls to americans and he defended the nsa's ability to gather this information. in essence, he made the argument there is a tradeoff here americans simply have to make. take a listen. >> i think it's important to the recognize that you can't have 100% security and also then have 100% privacy and zero inconvenience. we will have to make some choices as a society. >> the president taking a different tone nan his own director of intelligence last night, director of intelligence james clapper put out this statement in which he attacked the press for reporting on these stories. he said the unauthorized

disclosure about this is important legal program is reprehensible and risks important protections for the security of americans. larry, i should tell you just within the past couple of minutes here, we have gotten a new statement from facebook founder mark zucker berg. let's put up that statement, just out in the last couple minutes, zuckerberg saying i want to respond personally about the reports about prism. facebook is not and has never been a part of any program to give the u.s. or any other government direct access to our servers. zuckerberg saying if he got one reportedly sen to the verizon, facebook would fight that request aggressively. larry, some interesting pushback from the technology companies, honing in on this point that they don't give direct access to their servetories any u.s. government agency. phrase has been in a number of denials from the technology companies. we have to see more reporting here to see what it is specifically they are denying. they would appear to be denying

one of the very key points of the stories that came out just yesterday. >> eamon, we talked about this last evening, you broke this story whole, the apple denial. i don't know the answer, maybe you can help us. another report from the washington post which has kind of changed its position that the internet companies definitely helped out to maybe they helped out. i want to read this, the nsa and the fbi tapping directly into the central servers of these internet company, such as google and apple, tapping directly into the central servers. what do you make of that? does that mean that these government agencies can just go willy-yily into it without google signing off on it, without facebook signing off on it? >> larry, as you know, words matter. what the companies are saying is they don't give the government direct access. what that sentence says is that they are tapping directly into those servers. so, perhaps, there is a nuance

here of whether or not these companies willingly participated in this kind of a program. zuckerberg in his statement a few minutes ago calls this an outrageous story reporting on this program prism, which was the overall program that was broken last night to gather intelligence on the internet, including e-mails, digital phone calls, digital files, all the rest of it through the internet. they say that's only going after foreign targets, but, of course, american data is gathered up in that program. so i think one of the questions will be are these companies intentionally participating in this program and are they participating directly with the u.s. government? one pocket that's out there is that there is some kind of intermediary, perhaps a contracting firm in between the u.s. government and these companies. one thing we need to look at. a lot more reporting is needed here, larry. >> eamon javers, as always, thank you very, very much. so is this government under surveillance necessary to protect us against terrorism or is eight personal privacy breach of the cons sugs?

here now is a former assistant secretary of defense under bush senior jed babin and former secretary of defense under reagan frank gaffney, jed, i begin with you, mr. president obama today said legal and limited, nobody is listening to your phone calls, do you believe it? >> well, i kind of sort of do. frankly, it's a very puzzling that they actually need to go this broadly. i think that, frankly, mr. zuckerberg, with all due respect to him, he's way off base. if this is being done, gathering information from the internet, it's much more troubling. on the other hand, they may not need permission from the companies. they may get it from the court. if court may be able to authorize them. they can authorize them to do these so-called listening in to e-mails. it's obviously the wrong term, but they can do that without

being told, without telling the companies that. right now you have a situation where we are breaching possibly the 4th amendment. we are going a little broad on this. the metadata thing for the phone calls, really doesn't bother me that much. maybe they can where you are, who you called, that's not the same thing as listenening on a phone call. you have people like zuckerberg saying -- >> it's e-mails, whether they're reading the e-mails. >> frankly -- >> would you be in favor, i want to get you both guys on the record, if it's just foreign e-mails, are you okay with it or do you trust it or what? >> i think it's much more defensible that way. there are protections in place under the foreign intelligence under surveillance act to dump out information that's accidentally gathered about americans or, you know, reading their e-mails. that would probably be sufficient for help. i think it's very troubling if they go farther than just

foreign to u.s. e-mails. >> let's got to frank gaffney, first of all the telephone companies, they say they're not tapping into the phones. regarding the fisa overseas, yes, it's just foreign e-mails they're looking at. it's not domestic e-mails at home. mr. gaffney do you, a, trust that is the case? for me, after the irs scandal, it's hard for me to trust anything these actions say? do you trust what they say? secondly, is it necessary to prevent the war on terrorism? >> well, let me say at the outset, larry, i don't find myself agreeing with president obama on much. generally, he's not supporting strong national security programs and policies and i don't often find myself dulles agreeing with jay babbin who i have regard. i think this is a program that is balanced. as far as we know what's going on as the "wall street journal" editorialized today, thank you for data minding they call it.

i think what we are seeing purchase soviet uniont to the kind of carefully vetted and balanced efforts that have been evaluated not only by two executive branches under both republican and democratic administration, but also by the congress and also by the courts is an effort to use technology to do something we desperately need to do, which is to be able to detect, discern and counter folks who are trying to destroy us, quite clearly, quite explicitly and use stealth to do so. and i think that by going after these kind of metadata analyses, we're using that technology, we'rulesing it appropriately. >> one of my big questions, one of my personal reservations, do you trust the nsa or for that matter the fbi which may be tapping indirectly to these internet providers? do you trust them after the irs, after what we learned a whole lot of things in the government that's gone haywire in the last

month or two, do you say they will not listen to the phone calls and not read the e-mails? do you believe that, frank? that's a part of the debate here. >> yeah, look, it's a fair question. again, i don't think we know the answer to this point i think it goes back to the process, which is what i was trying to address earlier, larry. to the extent you have judicial review and authorization, that provides, i think, a check and balance on those sorts of abuses. there are protections in place, if, in fact, it turnings out they're not adequate, they should be strengthened. i do think it would be a terrible mistake, especially in an effort to pander to the demagoguesry we are hearing from the left and the liberal right that, this is a terrible invasion of privacy to abandon a necessary tool in a very serious and frankly becoming more serious more. >> jed babbin you are worried there is an invasion of personal property?

>> look, if you look at what mark zuckerberg is saying, if you go bonifacebook, the subject on e-mails is ripe for the possible abuse of it. sure, we want to have these tools vaibl available to the government. we do need the checks and balances from the court. so far, as far as we know, which isn't very far, we know the courts have taken an approach that should be authorized under the foreign intelligence under surveillance act. >> you made a key point, i got to get out. you made a key point. help me quickly on this, we don't really know much about this, right? we just learned there what 24 hours ago, 36 hours ago? the whole business about prism which i think is the really the interesting one and what the fisa court will rule and what mr. clapper is saying, there is stuff in the papers today on the internet, clapper testified before congressional committees and frankly misled them. i will not use the word lie, misled them. we don't know much about this jed babbin.

that troubles me. >> it troubles me, too, i think it's far broader than what we saw under fisa and the george bush of the nsa terrorist under surveillance program. that's what bothers me the potential for abuse is enormous. they're sweeping up information on people and e-mails on people, really, they should not have any privacy too. >> we will leave it there. thank you very, very much sample my concern is we don't know enough about the enemy, not na which know too much about our people. >> i want as to stop the terrorism. i'm a hawk on that. this stuff is a little different. anyway, you guys will come back. we will hash through this. we will learn more about it. we will evaluate it much more. clapper will have to testify again, as i said, there were reports on the internet that he misled congress about these intercepts for the tr internet companies and so forth. >> it wouldn't be the first time, larry, all right. >> you can believe it as much as you can believe holder. >> that's the problem. after all of this stuff, who can believe any of these guys?

you nailed it. the irs, i can't believe them. i can't believe the attorney general. i don't know, i believe you, you are all terrific. >> checks and balances. have a listen on what obama said about government snooping and national security when he was inaugurated back in 2009. >> as for our common defense, rereject as false the choice between our safety and our ideals. our founding fathers, our founding fathers faced with perils that we can scarcely immense, drafted a charter to insure the rules of law, a charter expanded by the blood of generations. those ideals still like the world and we will not give them up for expedients sake. >> okay. here's the president talking about i guess idealism and transparency. the problem is, it kind of sounds to me like he needs to appoint at scandal czar.

remember all those sars? he needs to appoint a czar to keep track of all these lie, whatever is going on, bombs going on every place. let's talk to our distinguished panel, jessica, senior strategist with schone consulting, conservative commentator, tony katz and jessica, let me start with you. you heard frank gaffney say how much he supports president obama. he is a hawkish conservative republican. is obama going further on stuff like this, okay, wiretapping and telephone records than democrats would have ever thought? >> i think it's difficult to say. i think you are completely correct, but we obviously don't have all the details and it would have been a lot bet fer we had found out about this not through a leaked document. i think that's where the problem comes from, misinformation comes out without anyone giving an authortative line on it. i don't think i can say

conclusively. >> you are right about the information. i went about about the wrong way. if george w. bush had had this, the media would have gone berserk and democrats ballistic. are those two groups giving obama a pass? i mean, this is very conservative hard line stuff that he is endorsing? it may in some sense be broader and doper than anything george w. bush ever did. what are the politics here? >> well, first, to go back to that statement, when it happens now, leaks are a horrible thing. when bradley manning leaks everything to the world, he's a courageous he. >> reporter: i think we need to have a focus on everything. >> who is bradley man something. >> the soldier with asange and wikileak, the whole thing. i think one of the real problems is the people who are trying to defend this and say, oh, it was the patriot act, oh, it was sensenbrenner. should we or should we not be

disgusted with the idea that our government of and by and for the people is holding on to our information. this isn't as zucker berg was talking on the facebook stuff. >> you don't like it. you are saying it's unconstitutional by the 4th amendment? >> i think it violates the 4th amendment. google came out with a statement very much mirroring the facebook. >> they're all denying it. we have to focus on that denial. mark simone, are you surprised obama is doing this? >> has this suffering in with everybody? it would be one thing to be targeted by all muslims. he's asked for the phone records of every single human being in america. that's hundreds of millions of innocent people. there is a picture now of this facility they built to store it in. it cost $2 b. it's as big as the pentagon. >> an e-mails? and e-mails? they have access to everybody's e-mail. >> he was so busy today denying he ever listened to the phone calls. that was never the question. he has a record of all your phone calls, who you talk to.

i thought it was so interesting al gore was so hysterical on this let's say al gore is doing business a foreign country. >> like al jazeera. >> let's say he is doing other business no one knows about. let's say if they target someone, they do wit the irs, they can do wit the phone numbers. >> absolutely. is a key point. stay with us, stocks soared today on the jobs report t. report still showed serious weaknesses. we will debate all that. later on, supposedly this disabled postal worker, listen to this, is caught red-handed on, get this "the price is right" game show. we have this crazy story and we're going to talk to somebody who catches disability scammers for a living. please goen don't forgive, free market is the right path to free market pros period of time. we need a little more to get those jobs cranked up. i'm kudlow. we'll be right back. you make a great team.

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i'm happy to see things getting a little better, things will continue to get better, but the president's policies are not helping. for those people that are out of work, those people taking jobs well beneath the pay they were used to, those people are having hard times. >> all right, that was governor

mitt romney on our show last evening. he was reminding us this economy is still far from where it should be. today we got another reminder of that. stocks did rally on the jobs number, not because they showed a strong recovery. indeed, non-farm pay roms rolled only 175,000 in may t. unemployment rate ticked up to 7.6%. the number was okay, not great, but here's the key, it was not nearly strong enough to signal a fed tapering or a tightening or whatever. it's a tepid recovery. it looks no strong tore me. i'm calling it 2%. by the way, i don't want the fed to tepid taper or tighten or restraint right now. because i think the economy is weak. anyway, let's talk to experts, wells fargo's chief economist john sylvia. we welcome backfill orlando at federated investors. john sylvia, i'm glad we got 175,000 jobs. that's better than losing jobs. as you know, i will read a

couple stats, let you respond to it. you look at three-month patterns, the last three months, job increases 155,000 average t. prior three months, 208,000, average. hours worked, 1.6% last three months, the prior was 3.3%. i see some weaknesses here. i see slowdown here. >> well, i think, larry, you have to ask yourself the fundamental question, are you trying to win the world series or playing for a 500 record? i think right now in the labor market we are playing for a 500 record. i think a couple of things are key. i think phil will probably build on this a little bit is in the last three months, we've lost manufacturing jobs and when we look at capital goods orders and the ism regional manufacturing surveys, they've all been very weak. it tells me the manufacturing industrial production part of the u.s. economy is, again, very weak. another -- >> then you agree with me. there are weaknesses in this story. there are significant

weaknesses. i can't get through john sylvia, we know each other. you tell me. i say it is still a 2% economy this idea of -- >> ideally. >> you say yes? >> yes. it's 2, 2.25% commitment we've had at this time last three years. we will have it this years ago four years in a row. what are you playing for, larry, to win the world series? have when it comes to american prosperity, i'm playing for the world series, i want 5% growth. i think if we had good policies and animals spirits and confidence in business, we would be turning out 350,000 new jobs per month. that's the decent thing. but having said all that, phil orlando, what is also interesting, all right, today's market rally may be a relief rally because the fed is not going to taper. but it was the cyclicals did very, very well, which surprises me. in fact, the morgan stanley cyclical index up 1.6%. stuff like industrial companies like boeing financials, in other words the stockmarket is saying the economy is going to get

stronger. >> none of this should be a surprise to you, larry. we made a call mid-april i guess it was right around tax day that from last november into mid-april, it was the defensives that were driving the market. investors were starved for yield and they were priegs in the spring swoon. this kurn -- pricing in the spring swoon. this current quarter gdp will be a percent-and-a-half, what has been happening over the six weeks the yield stocks have gotten too expensive, the cyclicals like financials have gotten really cheap t. reality is, at least in our view, is that the economy is going to pick up the pace in the second half of the year. so investors over the last six weeks or so, have started to bid up the cyclical stocks because they're cheap and they're starting to price in some better economics. >> a, i need some evidence that the economy is going to get better, like you said, b, i have to ask you, you can't have your cake and eat it, too. if you are saying cyclical stocks are rising because of better growth, let's say you are

right. i don't believe it. let's say you are absolutely right, then i say to you, that the federal reserve is going to snuggle up. they're going to take down all that new money creation and the era of higher interest rates will be upon us. you can't have it both ways, phil. >> you are right, larry. here's the thing t. consensus among fed watchers was that the federal reserve will start tienting at the fmoc meet income two weeks. we disagree. if we're right the second half of the economy starts to look better t. fed will start to in our opinion appropriately begin to taper or withdraw the combination at some point later this year the beginning of next year. >> are you saying this is a very important point. stocks will be immune to slowing down tear bonn boy something. >> yes. >> letting the long-term interest rates go up, that's what are you say something. >> yes, because investors at some point will realize the fed will only pull the accommodation if the economy is cranky. if the economy is still weak. >> you may be right.

you may be dead right. i don't want to be too bearish. i'm just not that false either. john sylvia, how high are long-term interest rates going to go? >> probably the rest of this year another 25 to 40 basis points is probably where they're going to go. again, it's the context. i think phil has it right. if the fed stocks to be more cautious, perhaps pulling back the tapering, looking at it maybe after september, i don't think before september, it will be in the context of a much stronger economy. >> all right. leave it there, gentleman, thank you very much, john sylvia and phil orlando. now, breaking news out of southern california tonight with a shooting in santa monica community college there. jaquie deangelis will join us next with that ugly story and programs some others. [ male announcer ] it's intuitive and customizable,

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it had nothing to do with the president or mayor bloomberg. back to you. >> that is some story. anyway, thank you so much. now, president obama just minutes away from meeting with china's president and, get this, he was expected to complain about alleged china hacking into our government and our corporations. we're going to get a live report on all of it later in the show. the latest on the irs scandal, a key lawyer got canned. i think we are for the closer today to learning who orchestrated this attack on conservatives. we will be back. i'm kudlow. stay with us, please.

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welcome back to the can you do lie reportment i'm larry kudlow. in this half hour, a top irs lawyer is out. it's the same irs lawyer who may have helped singling out conservative groups, but he is not the top dog quarterback. by the way, so many bombs going off around him, does president obama really need a scandal czar to keep track? he may need help on that. we'll have the latest on all those stories. later on, if you are collecting disability check, it's not a good idea going on

national tv dog strenuous tasks. we have the story of one postal worker who should not have come on down on "the price is right." we are a few minutes away from president obama's visit with china's president. our own john harwood is traveling with the president he joins us now. good evening, john. >> reporter: good evening, larry. after a long day of dealing with that under surveillance track, president obama has arrived here in rancho mirage, you see the vehicles of the president arriving. he will be talking in about 30 minutes with chinese president xi, going to raise complaints about cyberhacking, his former ambassador told me he will meet a chinese leader 15-years-old, sophisticated, understands a bit about america. has a kid studying at harvard, has the understanding-of-on the need for cyber and a whole lot of other issues. >> he rises up as somebody who

gets the economic side. he understands investment, trade, what it takes to make a marketplace work. the efforts have to be embarked upon. i am convinced he understands that part. you've got to move toward rule of law and expand civil society and trade and commerce. he's going to have to physical out a role for the internet in society. you can't bloikt and expect china to dom bomb innovative prospect longer term. >> reporter: larry the white house does not expect a major announcement act this. john hudspath told me he believes -- huntsman says more promising is the increasing china economy into the rest of the global marketplace, including that purchase of smithfield hams by a chinese conglomerate, that venture and others will force them to clean up its act. >> thank you for the update. appreciate it. what can we expect from the

meeting with the president xi. the keefe strategist, former professor at xinua. a panelist with us mark simone and tony katz, jessica, i have known, huntsman, john huntsman is right. coin integrated into the rural economy. fine. but the problem is, china lies, cheats and steals and they cyberhack. they go after all our corporate secrets, for heaven's sake. what are we going to do about that? how can we stop that? >> well, you know, i used to work if private equity in china. i dealt with that thing all the time. i never got on accurate state of financials. still i had to invest. i made good investments. the key there is alignment of interests. you have to fine things that china wants. china was access to u.s. markets and access to investments in the united states. so i think that, you know, it's that relationship that's got to be worked out. >> i'm sure you are right. they want access, okay.

like they wanted to buy some property where we were making drones. i mean, i think what china really wants is to steal our intellectual property, counterfeit our goods and get as many technological state secrets as they k. i believe. that i have no trust in the chinese. >> you know, there is an element in that. i think there is also a recognition in china, that itself short game. it's not the long game t. long game is developing into a modern society with rule of law. there are people in china who want to move in that direction. there are people who don't. >> all right, tony katz, i will bring you in. what's your take on this china story? >> i don't know how president obama is supposed to engage a whole stage of cyber security after these leak, a tf conversation about the nsa, i don't see huh he has any strength. >> i am going to defend him for his conservative policies, you will love him. it's completely different. he is not stealing secrets from other governments for foreign corporations. he is acting on behalf of the

united states security. i think that is completely different t. chinese are trying to cyber hack into our corporations and take stuff apart when we go over there to build over there in order to get our secrets. they're taking our intellectual property rights. obama is not doing that. >> intellectual property for a good long time, just anybody get getting a good bootleg movie, that's stealing rights as well. how can you lecture us, mr. president of the united states about keeping, going after people's individual records or personal information when are you doing just that. by the i what, he's brand-new. i'm not f sure if he will be in the mood to wheel and deal. you owe us a lot of money, so i think it will be a hey, this is a nice conversation. next time. >> my other teary is because i believe the chinese do lie, cheat, steal, they want to take all our intellectual property that president obama and other american officials should talk about this publicly and shame

the chinese. i mean, we don't have any direct power over that. it's a communist country. they will do what they want to do. we should shame them in the court of world opinion. that's what i think. >> i think there is tremendous room for the obama administration to get tougher on china. i think what is exciting about this summit is they will come together. both will approach it as equals, two great -- >> they're not going to come out of this with one darn thing, you know it, i know it. they will bicker. rancho mirage is a great place. lull around the pool, play some golf. they will not come up with anything. >> i think the chinese president is pretty sure of his agenda. he know what is he wants to say. he has dream for the future of china, military goals, economic goals. he's going to make those and the president is also going to stand up and be tough. >> as in taking over the united states. should we trust the chinese? >> maybe he came here to visit

his money. that's all. i'm still trying to figure out his name. i thought it was 11. i used to think tony is absolutely right. how is this president in a position to lecture the other president about going too far with the abusive power of his government. >> because we're not hacking into private corporations. >> we don't know that. >> yes, we do. >> mark is totally right. we don't know everything that's going to come out. every time we hear a story, we're like, oh my gosh, that's it. then then tomorrow comes. this white house has jumped the sharks so much, they're breeding sharks to jump. that's the kind of white house they are. >> you defend him. i got nowhere. >> i tried, too. >> you're the democratic strategist here. let me see your best stuff to defend obama. >> i think that obama and his advisers all know how important this meeting is. they're not going to get an opportunity to stare him face-to-face and say these things are okay to do, these tension are not okay to do.

we have some interests that align, mover that don't align. we need to have a serious conversation on the issues we don't align. >> i want to go back to patrick chovan ec. i will make a bold forecast here. nothing will change. >> yeah, i don't think that any of the complicated issues between china and the u.s. are going to be resolved by a sleepover. but i do think it's important that they sit down, that they get to know each other and this is a new chinese leader, presumably, he'll be in charge of china for the next ten years, we'll have to see. but it's important that they have that conversation and on the whole cyber hacking issue, i do think it's a big issue between the united states an china, i do think it's different. it's different between all countries spy for state reasons. and we can have a debate in the united states about what the limits of that should be. i'm not surprised coin does that, too. the big difference between cyber pillaging of ip. that's a big difference. regardless of whether the chinese are right or wrong to do

it. >> of course they're wrong. >> at itself a separate issue. >> you got the story right. i got these panelist frs here who are all gang up on me. they don't understand how bad the chinese are. i have to bring in donald trump. he'll set everybody straight. thank you very much. now, another top irs official is leaving the building. we have the latest on an agency lawyer who targeted the conservative groups, but this lawyer just got tossed out is not the quarterback in the whole story. that's next up on "the kudlow report." i've always kept my eye on her... but with so much health care noise, i didn't always watch out for myself. with unitedhealthcare, i get personalized information and rewards for addressing my health risks. but she's still going to give me a heart attack. that's health in numbers. unitedhealthcare.

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so i've found a way. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. ready to plan for your future? we'll help you get there. well, after six congressional hearings, are we any better knowing who ordered the targeting of conservatives itive groups or how high up the food chain is this going to go? again, i say, good evening, jackie. >> good evening, again, new details, awareness of that increased scrutiny targeted towards conservative groups. an interview conducted by congressional investigators with an irs employee based in cincinnati in july of 2010 reveals that a misfired e-mail from that employee altered a group of, alerted, cues me, a group of walk irs officials to

this six t. transcripts also show that the employee was emerging issues for the agency's tax exempt unit and corresponding with washington-based irs tax attorney carter hall. meantime, an irs source confirming that hall will retire and requested a retirement package. the story, of course, one of the scandals the obama administration is currently dealing with at the moment. a senior irs official publicly apologized for it at a washington conference, president obama, of course, fired the irs chief, larry. >> many thanks, jackie deangelis. we need czar, a scandal czar. anyway, let's go back to our panel. mark simone, this 70-plus-year-old lawyer may have been in on the news earlier. okay. he's not the guy, carter hall is not the quarterback for the irs, is he?

>> no, this is playing out exactly like watergate. he had this mcgrierd, john doan, that's what this carter hall is. these guys will talk. they'll lead you to the next group. this will lead to you the white house. >> the general count stull of the irs would have known since this guy worked for him, william wilkins. will put it right at the top of the irs pole. >> nobody at the irs had no reason to do this. this is for political reasons. it happens to slow down donations into tea party groups. there is no reason, no motivation for an irs person to do this. >> do we need a scandal czar? >> we have too many. >> have you the reporters, the irs. you got benghazi, now you've got all this eavesdropping and snooping. >> there is no doubt it is a bad scandal period. i don't think we need another scandal skar. i don't think we need another bureaucrat. i think we need honest answers. everyone will say, we're not

going to get them. but as far as the irs thing goes, i don't think that this is like watergate. i'm in the saying it's over. we still need to know. >> just breaking into one guy's desk? that was it? this was far worse. >> in every possible way. by the way the scandal czar, lend say lohan, she knows -- she needs a stable job. >> fabulous. >> you can keep her chained to the desk. no drunk driving, nothing. >> 12-step meetings right near the white house. >> there are many. i am sure. >> lots of familiar faces there. >> the problem isn't who knew, the problem is who didn't know? that's the key conversation in the entire irs scandal. who didn't know everything that was going on? who is the person that said we should be doing this, this is the way we shoulding a. this is the way our government should function, this is the way we should maneuver the irs to make our life easier? >> go ahead, jess. >> that's a broad one, not just to you. >> i'll take it for now.

then we'll open it up. >> a pat buchanan affair that a baum was such a laissez-faire guy out to lunch. >> i won't make that. we will start targeting, that's the most crucial thing to find out. we have a lot of committee hearings going on. >> i thought somebody made that list in the white house, in the suzanne cutter, is that her name? >> stephanie. >> i don't think stephanie cutter made that list. obviously, nobody has told me. >> 160 times, shulman. i used to work in the white house. i don't know to do 166 times. that's phenomenal. >> you get a good lay of the land, you know where the snacks are kept. >> the white house is a lovely place. i had lunch there. now, a record number of americans are getting disability payment, almost 11 million. could mean there is a record amount of fraud. we got this story of one postal worker who made a big mistake on national tv game show and could

go to jail for it. we're going to talk to a man who tracks down and catches the fraudsters in the act. "the kudlow report" up next. farf smart. so you're worried about house fires? stop smoking. manage your wires. watch out for space heaters. clean the chimney. get one of these. cool the romance. and of course, talk to farmers. hi. ♪ we are ers bum - pa - dum, bum - bum - bum - bum♪

a former postal worker pleads fwlt to disability fraud and this is how he she got caught. she appeared on the "price is right" she said she couldn't stand, lift, and she was on there spinning the wheel and winning a vacation. nearly 11 million americans are

relying on social security disability. we know she is not the only one lying about it. how hard is it to catch tease people? here is a private investigator with cpi investigatess investigations. welcome healey ha has san. how do you find out? people must be smarter? >> she did us a favor. she was on "the price is right." she had a facebook page. she had pictures of vacation, ziplining. she did us a favor. oftentimes, what happens, we're not provided the resources to go over these people. we may get five hours or ten hours to go after someone. there is too many claims. there are too many claims. >> who do you work on behalf of? >> the state insurance fund. >> they'll send you out there. where do you start? how do you know someone is a phony disability case? >> we have to go out there, put a camera on this person. >> you have a million people in

the program which has probably doubled. >> i don't know if it's a lot in the way people pick and choose who they go after. i really don't know. >> it is easier when people put the camera on themselves. >> social media today was the first place to look. >> and if this woman was smart, she would have gone on the "conan o'brien" show where no one would see her. when they give out the zeeblt, isn't there a medical exam? >> there is. >> how come she was lifting, rung, pedaling, whatever? >> certain injuries where it's hard to pin.. you know, sometimes have you people who are claim to have back issues. this woman -- >> i have a pack issue. >> so do i. >> probably 80% of the population has a book issue. >> absolutely. if you have a doctor that worpgs with you, it's easy, you are not an honest person. >> this is government dependency, come on, you know it, i know it, government dependency, almost half of the

households now depend on the government for their income. >> doesn't the insurance company have their own doctor to check on this? >> absolutely. >> the government dependency, come on. you know what the numbers are. >> i know you are absolutely not making it up. it's a problem and there are a number of people taking advantage of the system who shouldn't be. i'm not going as far as government dependency during the election. i think that was wildly out of control. but -- >> is she going to jail? >> i believe so. >> they need to make an example of her. >> i think she should. >> you think she should go to jail? >> i think everything went to held after bob barker left "the price is right." >> a good libertarian. >> i think the girls are still the same. >> no, now there are guy the whole thing is screwed up. if are you a kid who is circumstance you can't watch "the surprise right" anymore. >> i'm not home on disability, so i don't have time to watch. >> have you ever watched "the

price is right?" >> i'd hate to get caught by this guy. >> what about this disability this inc.? >> you know, it's like in massachusetts. they got that ebt card. it's like a credit card for welfare. we are too quick to hand out money. they found out they use them in topless bars, selling them to other people. we are too quick. if i was an insurance company, i'd have the best doctors in the world. it's probably cheaper to check everybody and prevent the fraud. >> it is not cheaper. you pay a guy like me, if i have ten hours to find out if a person is gentleman get matly on disability. that person might be home that day. how often do you sandy guy out? we get creative. >> come obvious the air. >> invite everyone. >> i'll see if they can climb up here on the panel. get into these chairs. thank you very 34u6. good luck on your searches. write we appreciate it.

thank you for the our panel. we have a big show monday night. i will be joined by financial so far ass services roumd table tim pawlenty, texas congressman brady and a plain financial analyst meredith whitney and her new book. you don't want to miss that show. that's it for tonight's show, i bid you all a great weekend. i'm larry kudlow. we'll see you on monday. tuitive, just like a tablet. so easy to use, it won a best of ces award from cnet. and it comes inside this beautifully crafted carrying case. introducing the all-new 2014 chevrolet impala with the available mylink system. ♪ [ beeps ] ingeniously connecting you to your life and the road. that's american ingenuity to find new roads. from the united states postal service a small design firm can ship like a big business.

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